Zain CEO To Step Down As Profits Drop

Zain says its CEO Nabeel bin Salama wants to step down from his post at the end of his contract in February 2013.

The Kuwaiti telecom operator missed third quarter expectations with a 15 per cent fall in profit, hit by a foreign exchange loss.

The former monopoly, which operates in eight countries in the Middle East and Africa, said on Sunday chief executive bin Salama would not renew his contract when it expires in February.

Zain made a third-quarter net profit of 59.7 million Kuwaiti dinars ($213 million), compared with a forecast for 63.7 million in a Reuters poll. Revenue fell 5.4 per cent to 311 million dinars.

“During this (nine-month) period Zain Group operations came under significant pressure with respect to extreme currency fluctuations in some of the markets in which we operate,” chairman Assad Al Banwan said. That cost Zain the equivalent of $146 million, he said.

In Kuwait, Zain competes with Wataniya, a unit of Qatar Telecom (Qtel), and Viva, an affiliate of Saudi Telecom Co, while its Iraq and Sudan units accounted for 62 per cent of subscribers and 58 per cent of revenue, according to its first-quarter results.

Zain’s Iraq unit plans to go ahead with a long-delayed stock market listing in Baghdad by early 2013 at the latest, its deputy chief executive said this month.

Under the terms of its licence agreement, Zain Iraq must launch an initial public offering of 25 per cent of its shares. Zain’s holding in its Iraq unit will fall to 51 per cent from 76 per cent if the IPO is fully subscribed.

Zain shares ended flat on the day, to be down 18 per cent this year.